Share of the Week from The Share Centre

Nick Raynor, investment adviser at The Share Centre, has picked Smiths News PLC as his Share of the Week.

"Investors looking for a fairly acquisitive company with a growing international base, a solid dividend and good growth potential should look no further than Smiths News,” he said. “The group comprises of the UK's leading wholesaler of newspapers and magazines Smiths News and Bertrams, a leading UK book wholesaler.   

"The group has £70m of funds available - £20m of which they used to buy the remaining business of Dawson Holdings after major contracts had been previously won.

“As well as having roughly a 55% share of the newspaper and magazine wholesaling market in the UK, Smiths News also has overseas exposure that will please investors. These regions have been preforming strongly with a 50% rise in sales in the US and 25% growth in France and Scandinavia.

"At current price levels the group's yield is well over 8% which is highly attractive for investors, especially as interest rates remain low. Although this has been boosted by the recent weakness on the share price, we believe it is realistic and therefore don't expect any cuts in the near future.

"The closure on News of the World may have concerned investors, however Smiths News noted the impact on the company would be minimal and unlikely to affect year forecasts, which remained unchanged in a recent trading update."